National Association of REALTORS

2016 PROFILE
OF HOME BUYERS
AND SELLERS

35th Anniversary Edition

The Voice for Real Estate

2016 LEADERSHIP TEAM

NAR RESEARCH STAFF

President
Tom Salomone

Lawrence Yun, Ph.D.

Chief Economist and Senior Vice President

President-Elect
Bill Brown

Caroline Van Hollen

Manager, BudgetAdministration and Strategic Planning

First Vice President

Elizabeth Mendenhall, ABR, ABRM, CIPS, CRB,
GRI, PMN, EPRO
Treasurer
Michael McGrew, CRB, CRS
Immediate Past President
Chris Polychron, ABR, CIPS, CRS, GRI
Vice President
Michael Labout, GRI, EPRO

Paul C. Bishop, Ph.D.

Vice President
Stephanie Davis
Administrative Coordinator
Jessica Lautz
Managing Director, Survey Research andCommunications
Meredith Dunn
Research Communications Manager
Brandi Snowden
Research Survey Analyst

Vice President
Sherri Meadows, CIPS, CRB, GRI, PMN

Amanda Riggs
Research Survey Analyst

Chief Executive Officer

Dale Stinton, CAE, CPA, CMA, RCE

Brian Horowitz
Research Survey Analyst
Ken Fears
Director, Regional Economics andHousing Finance
George Ratiu
Director, Quantitative andCommercial Research
Danielle Hale
Managing Director of Housing Statistics
Scholastica Cororaton
Research Economist
Michael Hyman
Research Data Specialist
Hua Zhong
Data Analyst
Nadia Evangelou
Research Economist

National Association of REALTORS

National Association of REALTORS

2016 PROFILE
OF HOME BUYERS
AND SELLERS

35th Anniversary Edition

2016 National Association of REALTORS

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

2016 PROFILE OF HOME BUYERS AND SELLERS

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

National Association of REALTORS

Contents
Introduction...................................................................................................................................4
Highlights....................................................................................................................................... 6
Chapter 1: Characteristics of Home Buyers........................................................................... 8
Chapter 2: Characteristics of Homes Purchased...............................................................26
Chapter 3: The Home Search Process................................................................................. 48
Chapter 4: Home Buying and Real Estate Professionals..................................................63
Chapter 5: Financing the Home Purchase............................................................................77
Chapter 6: Home Sellers and Their Selling Experience.................................................... 91
Chapter 7: Home Selling and Real Estate Professionals.................................................. 112
Chapter 8: For-Sale-by-Owner (FSBO) Sellers.................................................................. 121
Methodology............................................................................................................................. 133
List of Exhibits...........................................................................................................................134

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

2016 PROFILE OF HOME BUYERS AND SELLERS

Introduction

uying a primary residence for home buyers is a financial

decision but also an emotional decision that involves
many lifestyle factors. For most home buyers, the
purchase of a primary residence is one of the largest financial
transactions they will make. Buyers purchase a home not only
for the desire to own a home of their own, but also because of
changes in jobs, family situations, and the need for a smaller
or larger living area.
This annual survey conducted by the NATIONAL
ASSOCIATION OF REALTORS of recent home buyers and
sellers helps to gain insight into detailed information about
their unique experience with this transaction. The information
provided supplies understanding, from the consumer level, of
the trends that are transpiring. The survey covers information
on demographics, housing characteristics and the experience
of consumers in the housing market. Buyers and sellers also
provide valuable information on the role that real estate
professionals play in home sales transactions.
This years 2016 Profile of Home Buyers and Sellers is a special
commemorative anniversary report. NAR has administered the
survey since 1981. To mark the 35th year of publication, the
report highlights key trends in home buyer and seller behavior
that has changed or stayed the same over the decades with
historical trend line data. In this years edition, there are
expanded time series using the history of the collection.

has changed is the manner in which the data is collected.

In 1981, only a paper copy of the survey was offered. Today
recent home buyers can take the survey via paper or online,
and in English or Spanish. Because of its long history and
timely information available each year, the report is valued by
REALTORS, market analysts, and policymakers.
Data is collected from a nationally representative sample
of recent home buyers who purchased a primary residence
in the 12-month period between July and June. Data is also
representative of the geographic distribution of home sales.
Consumer names are obtained from Experian, a firm that
maintains an extensive database of recent home buyers
derived from county records.
Today the data set provides a wealth of data that is used to
create a number of spin-off NAR reports including: Home
Buyer and Seller Generational Trends Report, Recent Home Buyer
Profiles, Profile of Home Buyers and Sellers in Sub-regions, Real
Estate in a Digital Age, Veterans and Active Military Home Buyers
and Sellers Profile, and Moving with Kids.

The report has grown and evolved to keep up with changing

home buying trends and the need for more information. The
1981 survey was just 59 questions long. The 2016 survey
contained 132 questions. Although the report has evolved,
data has been collected for more than three decades
describing the demographic characteristics of home buyers
and sellers, buyers and sellers experience in the home
transaction process as well as market characteristics including
the use of real estate agents. One measure of how the market

Jessica Lautz
Meredith Dunn
Brandi Snowden
Amanda Riggs
Brian Horowitz
October 2016
4

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

National Association of REALTORS

In 2016, the share of first-time home buyers was 35 percent,

a three-point increase over last years 32 percent. This figure
gravitates back towards the historical norm at 40 percent
of the market. The median household income of buyers
increased again this year, likely due to a nationwide increase
in home prices caused by a lack of housing inventory. Married
and unmarried couples have double the buying power of
single home buyers, and may be better able to meet the price
increases of this housing market.
Tightened inventory is affecting the home search process of
buyers. Due to suppressed inventory levels in many areas of
the country, buyers are typically purchasing more expensive
homes as prices increase. The number of weeks a buyer is
searching for a home remained at 10 weeks. Buyers continue
to report the most difficult task for them in the home buying
process is simply finding the right home to purchase.

This report provides real estate professionals with insights

into the needs and expectations of their clients. What do
consumers want when choosing a real estate professional?
How do home buyers begin the process of searching for a
home? Why do some sellers choose to forego the assistance
of an agent? The answers to these questions, along with
other findings in this report, will help real estate professionals
better understand the housing market and also provide the
information necessary to address the needs of Americas real
estate consumers.

Tenure in the home has returned to a peak of 10 years again

this year. Historically, tenure in the home has been six to seven
years. Sellers may now have the equity and buyer demand to
sell their home after stalling or delaying their home sale but
may be facing reduced affordability to buy a new home.
Buyers need the help of a real estate professional to help them
find the right home for them, negotiate terms of sale, and help
with price negotiations. Sellers, as well, turn to professionals
to help market their home to potential buyers, sell within a
specific timeframe, and price their home competitively. Forsale-by-owner sales have dropped to the lowest level recorded
in this data set at eight percent of sales again this year, while
the use of the agent to sell the home stays at historic highs.
Likewise, the buyer's use of the agent is at historic highs as
buyers purchasing directly from a previous owner or through a
builder falls.

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

2016 PROFILE OF HOME BUYERS AND SELLERS

Highlights
Characteristics of Home Buyers

n Heating and cooling costs were the most important envi-

ronmental features for recent home buyers, with 84 percent finding these features at least somewhat important.
n Overall, buyers expect to live in their homes for a median of
12 years, while 18 percent say that they are never moving.

n
n

First-time buyers made up 35 percent of all home buyers,

an increase over last years near all-time low of 32 percent.
The typical buyer was 44 years old again for the third
straight year in a row, and the median household income
for 2015 rose again this year to $88,500.
Sixty-six percent of recent buyers were married couples,
17 percent were single females, seven percent were single
males, and eight percent were unmarried couples.
Eleven percent of home buyers purchased a multigenerational home, to take care of aging parents, for cost
savings, and because of children over the age of 18 moving
back home.
Ninety percent of recent home buyers identified as
heterosexual, three percent as gay or lesbian, one percent
as bisexual, and seven percent preferred not to answer.
Eighteen percent of recent home buyers are veterans and
two percent are active-duty service members.
At 31 percent, the primary reason for purchasing a home
was the desire to own a home of their own.

The Home Search Process

n

n
n

Characteristics of Homes Purchased

n

Buyers of new homes made up 14 percent and buyers of

previously owned homes made up 86 percent.
n Most recent buyers who purchased new homes were looking to avoid renovations and problems with plumbing or
electricity at 34 percent. Buyers who purchased previouslyowned homes were most often considering a better price
at 32 percent.
n Detached single-family homes continue to be the most
common home type for recent buyers at 83 percent, followed by seven percent of buyers choosing townhomes or
row houses.
n Senior-related housing stayed the same this year at 14
percent, with 20 percent of buyers typically purchasing
condos and eight percent purchasing townhomes or row
houses.
n There was a median of 12 miles between the homes that
recent buyers purchased and the homes that they moved
from.
n Home prices increased slightly this year to a median of
$227,700 among all buyers. Buyers typically purchased
their homes for 98 percent of the asking price.
n The typical home that was recently purchased was 1,900
square feet, had three bedrooms and two bathrooms, and
was built in 1991.

National Association of REALTORS

For 44 percent of recent buyers, the first step that they

took in the home buying process was to look online at
properties for sale, while 17 percent of buyers first contacted a real estate agent.
Seventy-nine percent of recent buyers found their real
estate agent to be a very useful information source. Online
websites were seen as the most useful at 86 percent.
Buyers typically searched for 10 weeks and looked at a
median of 10 homes.
The typical buyer who did not use the internet during their
home search spent only four weeks searching and visited
four homes, compared to those who did use the internet
and searched for 10 weeks and visited 10 homes.
Among buyers who used the internet during their home
search, 89 percent of buyers found photos and 85 percent
found detailed information about properties for sale very
useful.
Sixty percent of recent buyers were very satisfied with their
recent home buying process, up from 59 percent a year
ago.

Home Buying and Real Estate Professionals

n

n
n

Eighty-eight percent of buyers recently purchased their

home through a real estate agent or broker, and six percent
purchased directly from a builder or builders agent.
Having an agent to help them find the right home was
what buyers wanted most when choosing an agent at 50
percent.
Forty-two percent of buyers used an agent that was
referred to them by a friend, neighbor, or relative and 11
percent used an agent that they had worked with in the
past to buy or sell a home.
Nearly seven in 10 buyers interviewed only one real estate
agent during their home search.
Eighty-eight percent of buyers would use their agent again
or recommend their agent to others.

PROFILE OF HOME BUYERS AND SELLERS 2016

National Association of REALTORS

Highlights
Financing the Home Purchase

Home Selling and Real Estate Professionals

n
n

Eighty-eight percent of recent buyers financed their home

purchase. Those who financed their home purchase typically financed 90 percent.
First-time buyers who financed their home typically
financed 96 percent of their home compared to repeat buyers at 84 percent.
For 61 percent of buyers, the source of the downpayment
came from their savings. Thirty-five percent of buyers cited
using the proceeds from the sale of a primary residence,
which was the next most commonly reported way of securing a downpayment.
Forty percent of buyers saved for their downpayment for
six months or less.
The most difficult step in the home buying process was
saving for a downpayment, as cited by 13 percent of respondents.
Of buyers who said saving for a downpayment was difficult, 49 percent of buyers reported that student loans
made saving for a downpayment difficult. Forty percent
cited credit card debt, and 34 percent cited car loans as
also making saving for a downpayment difficult.
Buyers continue to see purchasing a home as a good financial investment. Eighty-two percent reported they view a
home purchase as a good investment.

n
n

For-Sale-by-Owner (FSBO) Sellers

n

Home Sellers and Their Selling Experience

n
n

n
n
n
n
n
n

The typical home seller was 54 years old, with a median

household income of $100,700.
For all sellers, the most commonly cited reason for selling
their home was that it was too small (18 percent), followed
by the desire to move closer to friends and family (15 percent), and a job relocation (14 percent).
Sellers typically lived in their home for 10 years before selling, an increase from nine years in last years report.
Eighty-nine percent of home sellers worked with a real
estate agent to sell their home.
For recently sold homes, the final sales price was a median
98 percent of the final listing price.
Recently sold homes were on the market for a median of
four weeks.
Thirty-six percent of all sellers offered incentives to attract
buyers.
This year, home sellers cited that they sold their homes for
a median of $43,100 more than they purchased it.

Sixty-four percent of sellers found their agent through a

referral from a friend, neighbor, or relative or used an agent
they had worked with before to buy or sell a home.
Seventy-two percent of recent sellers contacted only one
agent before finding the right agent they worked with to
sell their home.
Ninety-two percent of sellers listed their homes on the
Multiple Listing Service (MLS), which is the number one
source for sellers to list their home.
Seventy-seven percent of sellers reported they provided
the agents' compensation.
The typical seller has recommended their agent twice since
selling their home. Thirty-three percent of sellers recommended their agent three or more times since selling their
home.
Eighty-five percent said that they would definitely (70
percent) or probably (15 percent) recommend their agent
for future services.

Only eight percent of recent home sales were FSBO sales

again this year. For the second year, this is the lowest share
recorded since this report started in 1981.
The median age for FSBO sellers is 59 years. Seventy-three
percent of FSBO sales were by married couples that have a
median household income of $100,600.
FSBOs typically sell for less than the selling price of other
homes; FSBO homes sold at a median of $185,000 last
year (down from $210,000 the year prior), and significantly lower than the median of agent-assisted homes at
$245,000.
FSBO homes sold more quickly on the market than agentassisted homes. Sixty-seven percent of FSBO homes sold
in less than two weeksoften because homes are sold to
someone the seller knows.
Seventy-one percent of successful FSBO sellers who knew
the buyer were satisfied with the process of selling their
home.

n Sixty-one percent of sellers were very satisfied with the

selling process.

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

National Association of REALTORS

Methodology

n July 2016, NAR mailed out a 132-question survey using a

random sample weighted to be representative of sales on a
geographic basis to 93,171 recent home buyers. The recent
home buyers had to have purchased a primary residence
home between July of 2015 and June of 2016. A total of 5,465
responses were received from primary residence buyers. After
accounting for undeliverable questionnaires, the survey had an
adjusted response rate of 5.9 percent.
Respondents had the option to fill out the survey via hard
copy or online. The online survey was available in English and
Spanish.
Consumer names and addresses were obtained from Experian,
a firm that maintains an extensive database of recent home
buyers derived from county records. Information about sellers
comes from those buyers who also sold a home.
All information in this Profile is characteristic of the 12-month
period ending June 2016, with the exception of income data,
which are reported for 2015. In some sections comparisons
are also given for results obtained in previous surveys.
Not all results are directly comparable due to changes in
questionnaire design and sample size. Some results are
presented for the four U.S. Census regions: Northeast,
Midwest, South, and West. The median is the primary
statistical measure used throughout this report. Due to
rounding and omissions for space, percentage distributions
may not add to 100 percent.
From the 2016 Investment and Vacation Home Buyer Survey,
65 percent of home buyers were primary residence buyers,
which accounts for 3,738,000 homes sold in 2015. Using that
calculation, the sample at the 95 percent confidence level has
a confidence interval of plus-or-minus 1.32%.

National Association of REALTORS

PROFILE OF HOME BUYERS AND SELLERS 2016

133